MARATHON RUNNING SHOP Departmental Expense Allocation Spreadsheet For Year Ended December 31, 2019 Expense Totals Advertising Administrative Shoes Clothing Direct expense Indirect utilities expenses Total dept. exp. Service Dept. Expenses Advertising Dept. Administrative Dept. of Total expenses allocated 2$ $ $ 0 $

FINANCIAL ACCOUNTING
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Chapter1: Financial Statements And Business Decisions
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MARATHON RUNNING SHOP
Departmental Expense Allocation Spreadsheet
For Year Ended December 31, 2019
Expense Totals
Advertising
Administrative
Shoes
Clothing
Direct expense
Indirect utilities expenses
Total dept. exp.
0.
Service Dept. Expenses
Advertising Dept.
Administrative Dept.
Total expenses allocated
0 $
0 $
%24
%24
%24
Transcribed Image Text:MARATHON RUNNING SHOP Departmental Expense Allocation Spreadsheet For Year Ended December 31, 2019 Expense Totals Advertising Administrative Shoes Clothing Direct expense Indirect utilities expenses Total dept. exp. 0. Service Dept. Expenses Advertising Dept. Administrative Dept. Total expenses allocated 0 $ 0 $ %24 %24 %24
Marathon Running Shop has two service departments (advertising and administrative) and two operating departments (shoes and
clothing). The table that follows shows the direct expenses incurred and square footage occupied by all four departments, as well as
total sales for the two operating departments for the year 2019.
Direct Expenses
Square Feet
500
Sales
Department
Advertising
Administrative
$ 15,000
27,000
103,000
13,000
700
4,100
4,700
$124,000
186,000
Shoes
Clothing
The advertising department developed and distributed 190 advertisements during the year. Of these, 38 promoted shoes and 152
promoted clothing. Utilities expense of $74,000 is an indirect expense to all departments.
Complete a departmental expense allocation spreadsheet for Marathon Running Shop. The spreadsheet should assign (1) direct
expenses to each of the four departments, (2) the $74,000 of utilities expense to the four departments on the basis of floor space
occupied, (3) the advertising department's expenses to the two operating departments on the basis of the number of ads placed that
promoted a department's products, and (4) the administrative department's expenses to the two operating departments based on the
amount of sales.
Transcribed Image Text:Marathon Running Shop has two service departments (advertising and administrative) and two operating departments (shoes and clothing). The table that follows shows the direct expenses incurred and square footage occupied by all four departments, as well as total sales for the two operating departments for the year 2019. Direct Expenses Square Feet 500 Sales Department Advertising Administrative $ 15,000 27,000 103,000 13,000 700 4,100 4,700 $124,000 186,000 Shoes Clothing The advertising department developed and distributed 190 advertisements during the year. Of these, 38 promoted shoes and 152 promoted clothing. Utilities expense of $74,000 is an indirect expense to all departments. Complete a departmental expense allocation spreadsheet for Marathon Running Shop. The spreadsheet should assign (1) direct expenses to each of the four departments, (2) the $74,000 of utilities expense to the four departments on the basis of floor space occupied, (3) the advertising department's expenses to the two operating departments on the basis of the number of ads placed that promoted a department's products, and (4) the administrative department's expenses to the two operating departments based on the amount of sales.
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